Category: Real Estate

‘I was there’ will sustain

Main Photo: A ‘socially distanced’ Sylvan Lake (courtesy @papercandie – https://twitter.com/papercandie)

COVID-19 has been a humbling experience for tourism and hospitality owners around the world. Every design, financial and strategic consideration in the airline, hotel, sports, travel agency and restaurant industry (amongst many others) relies on the increasing wanderlust of people seeking to be the first to experience a life-changing moment in person. The post-2009 tourism boom has finally ended – and it took a pandemic to do it.

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RevPAR was slipping but COVID-19 killed things off for good

The (someday) post-Covid world will leave a lengthy shadow of fear. Many will point to these last five months as the time period that shifted mindsets from ‘I was there’ to ‘I saw it online and that’s enough for me thanks’.

I disagree. If anything, softness in the market has been developing for years.

While tourism has grown around the world, boosted by the low cost of air travel, the content marketing and digital media industries have already consumed a significant amount of investment and consumer dollars. The content marketing business will reach $107 billion dollars in 2026, built largely from people that consume entertainment electronically from home and attendance at sporting events have decreased – and continue to decrease – significantly. Tastes are beginning to change, sports (and the value of sports teams) have become increasingly expensive for the average fan (driven largely by the ego-induced bubble of the value of sports teams). The vast majority of teams, musicians, and plays are nearly completely reliant on ticket sales, especially where television revenues have struggled to keep up.

So: Is ‘I was there’ culture gone for good?

Doubt it. There are three reasons that makes me bullish:

Social distancing exhaustion is illustrative

People clearly are not interested in staying indoors – and risking health to get outside

As frustrating and alarming as the photos of people abandoning social distancing to crowd a beach or a hiking path, it’s illustrative of how the inability to achieve ‘I was there’ has reminded people of its importance. Most people, simply put, need to be around other people. An in person shared experience still activates the senses in a manner that we can’t seem to simulate without human contact. Zoom fatigue is killing us and building trust between workplaces or within a business is a constant struggle. We can maintain existing relationships digitally but promotion, trust and sales are still extremely reliant on person-to-person communication.

Near-total reliance on tourism is widespread around the world – and increasing

Thousands of businesses, teams and nations are too heavily reliant on tourism to allow it to fail. Though many airlines have consolidated or closed completely during the pandemic those that remain will see benefit in their ability to capitalize on pent up travel demand around the world. Hotels – with significantly stricter and more reliable cleaning programs than short-term vacation rentals – will benefit from increased consumer trust. Sports teams will continue to work tirelessly to integrate the digital experience into the in-person one. Entertainers don’t have much of a choice; there’s little revenue in streaming music sales, concerts remain the most profitable way to earn money. All these stakeholders will be incredibly aggressive in dragging consumers back and it is working. Even cruise ships have convinced people to get onboard (with predictable consequences) – if anything that should be evidence enough.

Content marketing unsurprisingly needs unique content

Online content marketing requires content – and even this generates clicks

Most importantly, however, in my mind? The most digital of businesses – online content marketing – is reliant on new content and the differentiation necessary to ‘stand out’. As the space gets busier this will require a larger investment in travel, clothing and camera work to be noticed. Flaunting wealth, even in the strangest ways, will still be used to create the envy, fame and popularity that brings the sponsorships and payments to ‘influence’ that makes those stars money. Outside of talent, of course, tourism, travel, and entertainment are still the simplest method for experiential content development.

The tourism industry’s focus needs to be melding the digital and in-person experiences to create reliance on both. I imagine restaurants interactive VR guests that you can interact with at your tables or virtual cocktail creation with the ability to precisely refine ingredients to your whims. Our business will change in creative ways that we have to embrace.

People will still value ‘being there’. If we are to survive, however, we need to embrace technology and ‘level up’ our investment in interactive experiences.

A Theoretical Quandary of Inner-city Community Building

A month ago, developers, business owners and I were invited to discuss ‘Climatic Resilience of Inner-City Neighborhoods’, specifically speaking about McCauley and the Quarters in Edmonton, by Ashley Roszko, a U of A Masters student. Unsurprisingly (I’m sorry, Ashley) that group of people that love to talk got derailed quite quickly – and I heard something that I’ve been dwelling on for the weeks that followed.

Anna Bubel from Another Way – a literal and metaphorical community builder and a kindred spirit in restoring old buildings – had this take (paraphrasing – please comment and clarify, Anna!):

One of Anna’s Lovely Projects (https://decolicious.ca/ ) / Photo: Rebecca Lippiatt

1) McCauley cannot be resilient – and cannot really change – because, 2) 30% of the housing stock is subsidized or supportive housing (the City’s reported numbers are slightly less but I’ll eat my socks if they’re not understated); which is, 3) an major disincentive for people to stay in the community; because, 4) we punish people for being successful by requiring them to move when they cross the income threshold for under-market units. Therefore, no new investment, no new services, no new amenities, no change.

That argument was new to me and I’ve been pondering the theory of it since. Subjectively, in looking at McCauley, this appears logical; it just doesn’t fit my worldview of urban planning.

Through a bit of research and thumbing through some old textbooks I’ve distilled my confusion based on the following concepts:

a) Absent outside forces, cities radiate out centrally in all directions equally (the Central Place theory and Rusk’s Theory of Urban Development from ‘Cities without Suburbs’);

b) Supply and Demand in Cities are cyclical (the heavily debated – not least due to its reported use to justify purposeful underinvestment in African-American neighborhoods in the use – ‘Neighborhood Life-Cycle Theory’; nevertheless, I think the concept has merit): demand and supply are both predictable – new housing can satisfy the demand of those more affluent, older housing will be maintained for less affluent occupancy and the oldest housing will be demolished until it’s viable to replace with newer housing.;

c) Durability of Housing (an excellent article on the concept): without any outside forces, houses are sufficiently durable to meet the basic shelter needs of people equally as it ages and depreciates (in order to accomplish the aging and movement suggested in (b)) and further implies that age of housing directly relates to its desirability and affordability (not strictly true, of course, but on the whole);

Simplified, the resulting growth pattern would be like a drop in a lake where the peaks are new construction and development of affluence (shown in white and ‘+’) and the troughs are aging and relatively lower-class properties (shown in blue and ‘-‘).

This is ugly because I made it.


Clearly exceptions exist, especially with respect to environmental factors – proximity to a river valley or parks area, specific target amenities in bedroom communities amongst others. We can see this pattern – again, simplified – in our cities.

Just not in McCauley.

My belief is that the threshold income qualifications for housing subsidies create one of those exceptions. The requirements commit buildings, rather than people, to remain rather than age. Once a person earns above the low-income threshold, they are obligated to move in order to maintain subsidized housing stock rather than evolve and receive investment over time. That is nonsensical to me.

By moving people when they earn “too much” they can’t truly settle their families into the area. Moving is always on the horizon. Those that can’t emerge from poverty stay, but those that do – and could potentially help the rest of the community do so – are encouraged to leave. Understandably many people wouldn’t want to stay, sure, but we ensure that they don’t. After all, why not add the trauma of moving schools, friends and neighbors to a family that is finding their feet? The same chronic under-investment predicted in the Neighborhood Life-Cycle Theory prevails. The expectation of a neighborhood’s decline plus the inability for higher earners to reinvest in those same areas all-but-confirms it.

I would argue that strong, sustainable communities are built around multiple generations and demographics living harmoniously, with housing, retail spaces and amenities available and open to all income levels. McCauley has not had that opportunity. The ideal solution is a ‘Habitat for Humanity’ style option. A low-income family is placed in a home and pays what can they afford (based on CMHC’s safe housing spend guidelines), build equity in the home through the differential of their rent and the true operational expenses of the home, and purchase that same property when their finances allow. They move their lives forward, invest in their neighborhoods and help others do the same. Neighborhoods would be stronger for it.

The question is – and I don’t have an answer – how can it be profitable enough for developers to take on the challenge and monitored well enough for government subsidies to not be abused?

All ideas welcome. It’s a problem that needs to be solved.

Refueling the Quarters Plan

The digital world has created avenues like these for people to yell into the wind about things that frustrate them. This is one of those times. If you’ve already heard me rant on this topic, my apologies. This is for your suffering.

Before I begin – I understand plenty of money, time, risk, blood, sweat, tears and mental sanity has gone into the Quarters plan from residents, business owners, real estate owners, developers and the City of Edmonton alike. I’m one of them. No one is blameless. The Quarters has not gone to plan for a variety of reasons, but there has to be a solution.

That’s the point of this.

I love architectural history. Much of Edmonton’s remaining historical sites are concentrated in historic centre of town, in and around Namayo and Jasper Avenues – the Quarters and surroundings. We are invested in the area and I am extremely, extremely passionate about its success. We can’t seem to get past the current disconnect of thought, though.

First, history. As early as 1967 [<- great backgrounder by Elise Stolte of the Edmonton Journal – she expertly commentates on local news and has written extensively on the Quarters over the years], the City of Edmonton has prioritized revitalizing the 1920s heart of the City. With no real investment, however, we’ve only cultivating well-worn complaints about the area. “No one walks there, everything is abandoned”, “It’s all parking lots and homeless people”, and so on.

The 2006 Vision and following Quarters Area Revitalization Plan created so much hope. An actionable plan! Millions of dollars invested in neighborhood revitalization! It was my first experience of our failed attempts at a rebuild (as Edmontonians we should be used to this) for the Downtown East problem and, without the bias of numerous historical failures to cloud my excitement, expectation levels were high.

Time passed. 2008 happened and slowed things down. The Ice District was announced and happened – priorities shifted. We built a new sometimes working LRT line, that took money. Two bridges were started, encountered structural failure, were repaired and opened. Still, precious little happened in the area. 96 Street’s ‘revitalization’ – creating a single lane ‘dead area’ for foot or vehicle traffic – was the single accomplishment the City had.

So, with no projects in sight, we got the ‘anything is better than nothing’ approach. And, honestly, I get it. I don’t blame the City for doing it. Large projects sometimes need a kick in the pants to move forward and I don’t think that’s anything to be ashamed of. It is what it is.

There is, however, responsibility to ensure that the ‘anything is better than nothing’ proposal is representative, or at least iterative in some way, of the overall vision. That’s not really what we got, and the City and stakeholders knew it.

Speaking to the Quarters/Hyatt Place/Unknown branded hotel on 96 Street:

The hotel blocks more sunlight and won’t have residents to support local cafés and businesses the way, say, a condominium tower would. But city hall needed something to go ahead, and that’s the real key, says Young.”

With the Aldritt Tower:

For many, the vote came down to whether they believed the tower will help or hinder redevelopment in the rest of the east downtown area, and whether enough public consultation occurred before the underlying redevelopment plan saw substantial change.” [much thanks to Elise Stolte again]. “This viewpoint was critical to The Quarters redevelopment plan, which envisioned a public park acting as a catalyst. That could still happen, but in a different way.”

Progress for progress’ sake. The City spent fortunes on developing a vision of what the Quarters could be, promised it to stakeholders, and then sacrificed its core ideals to see new development.

I don’t blame either builder/developer. They’re in the business to make money. You get the best deal you can; If the City offers financial or administrative support to get something done then you take it. Investments don’t make money because they’re the right things to do (even if they should be); they make money because they’re profitable things that (hopefully) are right. People don’t turn down free things. Just because you, me, and most of the City wouldn’t have done it doesn’t mean that others will act the same.

And we shouldn’t have expected any different, in truth.

The stakeholders in the area acted predictably – the City desperate to see any construction to justify their investment, developers taking advantage of a that desperation, a bunch of landowners gouging the City and prospective purchasers for property, the existing community feeling ignored and forgotten, and community-focused business owners – with limited capital to begin with – are extremely hesitant to open businesses without some possibility of success. 

Honestly, we didn’t do much different either. We started investing and re-envisioning our area properties recently, well after the hotel was built. We’re also to blame.

In summary, it’s a ‘hurry up and wait’ problem. We have to ‘hurry up’ – entice people to interact with the area by highlighting history and encouraging (financially and otherwise) businesses to set up there; and ‘wait’ – allow successful activity to further entice larger projects and businesses to add amenities to the area.

This is how I’d proceed:

1)

Gravel parking lots suck. We all know this. Every Quarters discussion ends with ‘the parking lots all need to go’. Affordable parking is impossible to find in ‘downtown proper’, though, as the City has successfully pushed lot owners to sell. I see this as an opportunity.

I argue that (most) people will do what they’re economically motivated to do. So rather than trying to find someone to redevelop all these lots at once (impossible), I would suggest a compromise:

Issue a temporary use permit for a set duration of time – requiring landowners with these lots to utilize a minimum of 10% of their lands for retail, commercial or community use and provide free power and water to those businesses that use it. Food trucks, hot dog carts, landscaped park areas, whatever. Land owner gets a building or use permit approved and they keep their gravel lot (and its income) as long as it’s open. If the lot owner refuses, the City denies the business license of that parking lot and the lot gets closed as they hope. I’ve been told by another frustrated Quartersian this is the Portland model of revitalization – they did mostly OK, didn’t they?.

This would, theoretically, create affordable (and habitable) commercial space for people to create community in – a food truck looking to transition into a full-time restaurant, a ‘maker’ looking to transition from the City Market and open their first storefront, an affordable workspace, first art gallery or commercial catering kitchen. Similar neighborhoods – Inglewood in Calgary, Whyte Avenue in Edmonton, Gastown/East Hastings in Vancouver – were driven by the availability of affordable space. Let’s create it.

And, where Portland failed, we’d have a chance to succeed. Existing residents – from the homeless to the working poor to the lower-middle class – could have the convenience stores and affordable food options that the neighborhood desperately lacks. Less Joey Bell Tower and more Nook Cafe on 97 Street and 101A Avenue.

2)

Supporting businesses in the neighborhood is a given, especially with the amount of money the City has invested in the vision there. With Churchill Square out of commission we have a golden opportunity to create activity on the 96 Street corridor and get people excited about the prospect of having a business there.

We are the Festival City. Let’s activate that space. We have a golden opportunity to reintroduce the neighborhood the way the City wants it seen, and we can’t afford to miss it. [Since I wrote this, the Grey Cup festival/street party has been announced and is utilizing some Quarters and almost-Quarters areas in their celebrations. More of the same, please!]

3)

The City has used the Development Incentive and Façade Improvement Programs to try and get existing owners to do something. I applaud that wholeheartedly. It hasn’t really worked in the Quarters, though. Some buildings have been left too long, some owners don’t need the money or care for the headache. Those spaces and the streets around them need to be activated to get people used to visiting the area to eat, drink and shop at their favorite places.

Pop-up shops, restaurants and food trucks can all build retail traffic but will still need encouragement to test the area out – discounts on business and vending permits in exchange for a certain number of weeks in the area, reimbursement for AGLC Special Event licenses in the area, free parking spaces for food truck or temporary retail parking, streamlined approvals for OSCAM permits and City ‘donations-in-kind’ for securing or policing smaller events in the area.

Smaller incentives for smaller businesses to take smaller risks in a new area for smaller amounts of money from the City (relative to the Development Incentive and Façade Improvement grants). If temporary retail can take off it will entice others to activate their retail space and make that additional money.

All told, despite all the issues we are slowly seeing new, appropriate development. I’m trying to stay positive.  The Hat at Five Corners will show up at the intersection of 95 Street, 102 Avenue and Jasper Avenue in the next year and a half, with plenty of retail space and new residents filling in the community. Hopefully Edmontonians can be convinced to give it a shot.

As the Quarters ARP document stated – “The Quarters is a place where community is important and pride and investment in the neighbourhood is evident.” Hopefully it works.

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